Australian Securities Exchange – Company Announcements Platform Centuria Property Funds No. 2 Limited CENTURIA INDUSTRIAL REIT 2018 Goldman Sachs Small and Mid-Cap Conference Presentation Sydney 18 April 2018, Centuria Property Funds No. 2 Limited (CPF2L) as Responsible Entity of Centuria Industrial REIT (ASX:CIP) provides a presentation that will be used at the Goldman Sachs ninth annual Small and Mid-Cap Conference being held today in Sydney. – Ends – For more information or to arrange an interview, please contact: Ross Lees Trust Manager – CIP Centuria Property Funds No. 2 Limited Phone: 02 8923 8923 Email: [email protected]Tim Mitchell Group Head of Investor Relations Centuria Capital Group Phone: 02 8923 8923 Email: [email protected]About Centuria Property Funds No. 2 Limited Centuria Property Funds No. 2 Limited (CPF2L), a wholly-owned subsidiary of Centuria Capital Group (CNI), is the Responsible Entity for the ASX listed Centuria Industrial REIT (CIP). CIP is Australia’s largest ASX-listed income focused industrial investment vehicle and is included in the S&P ASX300 index. CIP owns a portfolio of 39 high quality industrial assets with a value exceeding $1 billion, the properties are located in key metropolitan locations throughout Australia. CPF2L, combined with Centuria Property Funds Limited (CPFL), the Responsible Entity for the ASX listed Centuria Metropolitan REIT (CMA), has $3.7 billion of funds under management in 17 unlisted property funds, one open-ended diversified property fund and two listed REITs. CNI is an ASX-listed specialist investment manager with $4.6 billion in funds under management. www.centuria.com.au
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Australian Securities Exchange – Company Announcements Platform
Centuria Property Funds No. 2 Limited
CENTURIA INDUSTRIAL REIT
2018 Goldman Sachs Small and Mid-Cap Conference Presentation
Sydney 18 April 2018,
Centuria Property Funds No. 2 Limited (CPF2L) as Responsible Entity of Centuria Industrial REIT
(ASX:CIP) provides a presentation that will be used at the Goldman Sachs ninth annual Small and
Mid-Cap Conference being held today in Sydney.
– Ends –
For more information or to arrange an interview, please contact: Ross Lees
Average monthly online Retail Sales Share of eCommerce Sales
$1,000
$600
$400
$800
0
$200
38.5
39.5
37.5
35.5
35.0
36.0
37.0
38.0
39.0
36.5
Source: Source: ABS / Colliers Research Note: ‘eCommerce’ defined as ‘pure-online sales’
Source: IMF
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CENTURIA INDUSTRIAL REIT I GOLDMAN SACHS SMALL AND MID-CAP CONFERENCE I 18 APRIL 2018
1) Source: Knight Frank Research
Availability reducing across all key marketsMarket supply 1
Available Space – Sydney
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Prime Secondary
1,200
1,200
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Available Space – Melbourne
Prime Secondary
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Available Space – Brisbane
Prime Secondary
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CENTURIA INDUSTRIAL REIT I GOLDMAN SACHS SMALL AND MID-CAP CONFERENCE I 18 APRIL 2018
Section 3
Portfolio overview
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CENTURIA INDUSTRIAL REIT I GOLDMAN SACHS SMALL AND MID-CAP CONFERENCE I 18 APRIL 2018
High quality assets accomodating quality tenantsPortfolio composition
1. Includes acquisition of Lot 14 Sudlow Road, Bibra Lake, WA and 207-219 Browns Road, Noble Park, VIC, exchanged on 29 June 2017
Portfolio Snapshot 1H18 FY17 1 1H17
Number of assets 39 38 37
Book value $m 1,005.2 961.2 911.9
WACR % 7.02 7.33 7.42
GLA sqm 766,539 757,944 693,620
Average asset size sqm 19,655 19,945 18,746
Occupancy by income % 95.9 92.1 96.1
WALE by income Years 4.9 4.4 4.4
AWH Woolworths
Green's General FoodsVisy Board
The Reject ShopAPI
OroraVIP Petfoods
K & S FreightersBradnam's Windows and Doors
12345678910
Tenant % of total incomeRank
8.1%8.1%
6.4%5.3%
4.3%4.2%
3.9%3.5%
3.4%3.4%
18%QLD
SA
WA
NT
NSW
ACT
VIC
39%
27%
2%
1%
13%
Geographic Diversification (by value)
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CENTURIA INDUSTRIAL REIT I GOLDMAN SACHS SMALL AND MID-CAP CONFERENCE I 18 APRIL 2018
1. FY19 will further reduce to 10.2% following settlement of 39-45 Wedgewood Road, Hallam, VIC
– Record leasing in 1H FY18, 20.1% of portfolio leased over a six month period
– 100% tenant retention in 1H FY18 driven by leasing transactions with major occupiers
– Executed one of Australia’s largest leases, 83,781sqm to AWH
– High occupancy of 95.9%, portfolio WALE of 4.9 years
– Significant reduction in portfolio vacancy and near term forward lease expiry
Operational highlights
Active management generates record leasing volume
Weighted Average Lease Expiry (by income)
70 (%)
60
50
40
30
20
10
0
1H18 FY17
FY18
3.5%
5.0%
FY20
14.2%
24.8%
47.3%
FY19 1
11.2%
11.8%
FY21
3.2%
4.9%
Vacant
7.9%
4.1%
FY22+
62.1%
WALE4.9 years
Occupancy95.9%
47.3%
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CENTURIA INDUSTRIAL REIT I GOLDMAN SACHS SMALL AND MID-CAP CONFERENCE I 18 APRIL 2018
Transactional highlights
Acquisitions Divestment
207-219 Browns RoadNoble Park, VIC
– $37.0 million acquisition, 7.0% initial yield 2
– 8.8 year WALE 3
– Adjoins existing CIP four hectare asset at 500 Princes Highway, Noble Park
Lot 14 Sudlow RoadBibra Lake, WA
– $28.0 million acquisition, 8.8% initial yield 2
– 7.8 year WALE 3
– Re-leased 100% of the property ahead of settlement
– Adjoins existing CIP asset at 310 Spearwood Avenue, Bibra Lake
92 Robinson AvenueBelmont, WA
– $11.2 million acquisition, 11.0% initial yield 2
– 100% leased to Toll Transport until 2021
– High quality, fit-for-purpose asset in infill location situated between Perth CBD and Perth airport
39-45 Wedgewood DriveHallam, VIC
– $10.0 million divestment, 7.5% premium to book value
– Settlement to occur in June 2018, ahead of FY19 lease expiry
Over $130m1 transacted to improve portfolio quality
1. Includes CIP’s 7.7% interest in Propertylink Group and 43-45 Mica Street, Carole Park, QLD
2. Acquisition prices and initial yields before transaction costs
3. WALE by area
CENTURIA INDUSTRIAL REIT I GOLDMAN SACHS SMALL AND MID-CAP CONFERENCE I 18 APRIL 2018
Section 5
Summary
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CENTURIA INDUSTRIAL REIT I GOLDMAN SACHS SMALL AND MID-CAP CONFERENCE I 18 APRIL 2018
– CIP is Australia’s largest ASX focused income industrial REIT with 100% exposure to industrial assets
– Managed by Centuria Capital (ASX:CNI), a specialist fund manager with $121m 1 co-investment
– CIP’s portfolio is nationally diversified with highest weightings towards NSW and VIC markets
– The portfolio has undergone significant active management
> Near term lease expiries have been significantly reduced over the last 12 months, increasing WALE to 4.9 years
> Continued execution of complementary acquisition and disposal initiatives
Summary
– Australia’s industrial market continues to experience strong demand from domestic and international investors
– Tenant demand improving
> Adaptation towards emerging technological trends
> Uplift from traditional manufacturing sectors
– Forecast FY18 distributable earnings of 19.5-20.0 cents per unit
– Forecast FY18 distribution of 19.4 cents per unit
1. Based on CIP closing price of $2.45 as at 31 March 2018, and CNI disclosure of 21 Nov 2017
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CENTURIA INDUSTRIAL REIT I GOLDMAN SACHS SMALL AND MID-CAP CONFERENCE I 18 APRIL 2018
CIP, Australia’s largest ASX listed income focused industrial REIT
Key Metrics at 31 December 2017
40.6%Gearing 3
95.9%Portfolio
occupancy 4
4.9yrsPortfolio WALE 4
39High quality assets
$1.0bPortfolio value
19.4cpuFY18 distribution
guidance
$608mMarket
capitalisation 1
7.9%FY18 forecast
distribution yield 1
1. Based on CIP closing price of $2.45 on 31 March 2018
2. Source: Moelis & Company
3. Gearing is defined as total borrowings minus cash / total assets minus cash and goodwill
4. By income
12 month total unit holder return outperforming S&P/ASX300
A-REIT Index at -0.1% 2
6.7%
2
CENTURIA INDUSTRIAL REIT I GOLDMAN SACHS SMALL AND MID-CAP CONFERENCE I 18 APRIL 2018
PAGE 18CA-CIP-17/04/18–00777
This presentation has been prepared by Centuria Property Funds No. 2 Limited (ABN 38 133 363 185, AFSL 340 304) (‘CPF2L’) as responsible entity of the Centuria Industrial REIT (ARSN 099 680 252 (‘CIP’ or the ‘Trust’).
All information and statistics in this presentation are current as at 18 April 2018 unless otherwise specified. It contains selected summary information and does not purport to be all-inclusive or to contain all of the information that may be relevant, or which a prospective investor may require in evaluations for a possible investment in CIP. It should be read in conjunction with CIP’s periodic and continuous disclosure announcements which are available at www.centuria.com.au. The recipient acknowledges that circumstances may change and that this presentation may become outdated as a result. This presentation and the information in it are subject to change without notice and CPF2L is not obliged to update this presentation.
This presentation is provided for general information purposes only. It is not a product disclosure statement, pathfinder document or any other disclosure document for the purposes of the Corporations Act and has not been, and is not required to be, lodged with the Australian Securities & Investments Commission. It should not be relied upon by the recipient in considering the merits of CIP or the acquisition of securities in CIP . Nothing in this presentation constitutes investment, legal, tax, accounting or other advice and it is not to be relied upon in substitution for the recipient’s own exercise of independent judgment with regard to the operations, financial condition and prospects of CIP.
The information contained in this presentation does not constitute financial product advice. Before making an investment decision, the recipient should consider its own financial situation, objectives and needs, and conduct its own independent investigation and assessment of the contents of this presentation, including obtaining investment, legal, tax, accounting and such other advice as it considers necessary or appropriate. This presentation has been prepared without taking account of any person’s individual investment objectives, financial situation or particular needs. It is not an invitation or offer to buy or sell, or a solicitation to invest in or refrain from investing in, securities in CIP or any other investment product.
The information in this presentation has been obtained from and based on sources believed by CPF2L to be reliable.
To the maximum extent permitted by law, CPF2L and its related bodies corporate make no representation or warranty, express or implied, as to the accuracy, completeness, timeliness or reliability of the contents of this presentation. To the maximum extent permitted by law, CPF2L does not accept any liability (including, without limitation, any liability arising from fault or negligence) for any loss whatsoever arising from the use of this presentation or its contents or otherwise arising in connection with it.
This presentation contains information as to the past performance of CIP. Such information is given for illustrative purposes only, and is not – and should not be relied upon – as an indication of the future performance of CIP.
This presentation may contain forward-looking statements, guidance, forecasts, estimates , prospects, projections or statements in relation to future matters (‘Forward Statements’). Forward Statements can generally be identified by the use of forward looking words such as “anticipate”, “estimates”, “will”, “should”, “could”, “may”, “expects”, “plans”, “forecast”, “target” or similar expressions. Forward Statements including indications, guidance or outlook on future revenues, distributions or financial position and performance or return or growth in underlying investments are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance. No independent third party has reviewed the reasonableness of any such statements or assumptions. No member of CPF2L represents or warrants that such Forward Statements will be achieved or will prove to be correct or gives any warranty, express or implied, as to the accuracy, completeness, likelihood of achievement or reasonableness of any Forward Statement contained in this presentation. Except as required by law or regulation, CPF2L assumes no obligation to release updates or revisions to Forward Statements to reflect any changes. The reader should note that this presentation may also contain pro forma financial information.
Distributable earnings is a financial measure which is not prescribed by Australian Accounting Standards (‘AAS’) and represents the profit under AAS adjusted for specific non-cash and significant items. The Directors consider that distributable earnings reflect the core earnings of the Trust.
All dollar values are in Australian dollars ($ or A$) unless stated otherwise.
Disclaimer
CENTURIA INDUSTRIAL REIT I GOLDMAN SACHS SMALL AND MID-CAP CONFERENCE I 18 APRIL 2018